tv First Up With Angie Lau Bloomberg July 13, 2015 7:00pm-8:01pm EDT
♪ angie: ready for a hard sell. ras prepares- tsip to lay out his deal for grreece. hardliners say they cannot and will not support it. on the edge. iran nuclear talks pass another deadline. reports say an agreement could come at any time. and on a roll. look for further gains as more suspended companies return to trade. welcome to "first up."
i am angie lau coming to you live from bloomberg's asian in hongters right here kong. let's check in on markets right now in asia and to new zealand. it is .3% up, but the new zealand dollar is still under pressure, down for a third day. we are also counting down to the opens in australia, japan, and korea. let's get over to japan. the nikkei last closed in the green. check that out -- above the 20,000 mark. that very critical, psychologically-important 20,000 mark. futures in chicago are pointing to a higher open. we also have a weaker yen that is supporting the equity rise that we saw yesterday on japan equities. right now, we have the greek ,rime minister back in athens facing the task of selling the deal he struck to save the
economy. months of negotiations and bitter personal squabbles ended with an abrupt u-turn by alexis tsipras. some of his own party say he abandoned his principles and caved in to german pressure. zeb eckert is following the latest developments for us. a very interesting headlines. zeb: absolutely. alexis tsipras flying into a city of upheaval, athens. his own party adamantly opposed many of these proposals. this amount to a loss of sovereignty, for some -- to some extent. that is what those who are critical of it are saying. requires them to submit to extensive international oversight. all the things he was campaigning against and his party campaigned against. harsh austerity measures. asset sales were billions of dollars. these -- worth billions of dollars. these things greece must agree to. it is not want to be a pretty
situation. he has until wednesday to get approval for the key elements of this agreement. he faces a party that is not very welcoming. the syriza party is not very welcoming for his return. this third bailout in five years amounting to 96 billion u.s. dollars, if you do the math. it comes with harsher austerity terms, harsher than greece has ever seen before, and more extensive international oversight. what is likely to happen next is change within greece's own government. we are expecting elections there. that could be the next move. let's listen to what opposition lawmakers are saying about the deal. government, which has lost its majority and does not have the confidence of parliament, a government which believes, says, and claims different things with a gun to his head -- this is an unnatural
thing. the situation cannot last very long. either the deal is implemented with borrowed goods or we go to a unity government. there are no other choices. zeb: as the political landscape in athens right now is certainly very intense, alexis tsipras fought hard to take away these austerity terms. instead, his government and country will be subject to years of additional, very challenging sanctions. angie: the imf is now stating that greece missed another payment here. saying that the latest payment, do monday, "was not received" and that the fund's executive board has been informed. , the action efforts that is required by greece from its creditors to see if they are going to get this money.
zeb: the imf board was reviewing anece's request for extension of the payment that they missed a week or two weeks ago. 1.7 billion, the number. ass payment will likely come part of this overall aid package that it has received from the europeans. first, the approval process needs to be followed through. the approval process of taking this through parliament in athens. certainly, i would think the imf would get its piece of the money when it is approved. we know there is no love lost between the imf as well as mr. suppressed -- tsipras. he has been critical of the imf. angie: also critical and criticized is german chancellor angela merkel or her role. zeb: it has been interesting to watch her resolute, calm response. she has been clear that she wants to maintain european unity and wanted to keep greece within
the eurozone. it also became clear at the end of these negotiations when she said yesterday or two days ago that trust had been lost. that was a very important statement from the german chancellor because it indicated that even she had lost trust in mr. tsipras. now there is perhaps some backlash because angela merkel and the germans are being used of a coup in greece, essentially. economic blackmail is what some are calling it. all sorts of terms. some of them quite harsh in their own right being leveled against the german chancellor. germany, of course, does hold the economic sway and the power. that is because germany earns the money. it produces the goods. it has the greatest gdp. it has the voice and the leverage to be in charge, running the show. angela merkel is going to face a lot of criticism after this, but she will be remembered for how she stood up for greece
throughout the entire process. she wanted greece to remain in the euro from the beginning. angie: the details that came out in the last hour -- greece has missed a second debt payment to half a to the tune of billion dollars. before, they had asked for an extension. half $1 million, that is not that much to have missed a payment. zeb: they can send it all in one check. on ouryou can get more top stories at one digital destination. bloomberg.com, why there could be an explosion in big oil fields just around the corner. plus, how tourism has surged to cuba. check it out. checking other headlines for you
right now, the iranian nuclear talks have missed yet another deadline. there are growing rumors coming out that a deal may be close. diplomats are preparing the final checks on the agreement, although no time has been set for a possible release. the white house has signaled there are still some sticking points. tension is said to have risen. said somerts diplomats walked out and blamed the other side. investigation is widening into whether some of the trades by deutsche bank allowed russian clients to move money abroad without alerting authorities. the new york banking regulator has asked for e-mails and memos surrounding the transactions. the trades saw stocks bought in rubles through the russian unit and were simultaneously conducted in dollars through london. and mark mobius is stepping down as the lead manager of the $2.9 million -- $2.9 billion templeton emerging markets fund.
.e will remain chairman the fund initially delivered gains, but has seen declines in the past few years. u.s. stocks rose following europe higher as concerns about greece eased. su keenan with more from new york. su: big jumps across the board after greece reached a deal with creditors. nasdaq, it was a 1.5% gain. the dow was closed be -- was close behind. 500 posted its best three-day rally so far this year. all three major indices are now posting gains for the year so far. we saw consumer shares way ahead. google, microsoft, and facebook all gaining 2% or more.
and we had a merger of a pipeline company. is greece out of the woods, though, is the real overarching question. when you look at the etf that tracks greece equities, it actually slipped. economist paul krugman said he is not that optimistic about what is ahead for greece. >> as long as you have a debt to gdp ratio that is never growing, when are you going to get people believing that it is time to spend, time to invest? butoes fit together, nothing was resolved except that we learned that this greek government does not have the courage of its own convictions. on retailile, a focus and housing data this week. earnings kick off tomorrow. j.p. morgan chase, wells fargo, and wednesday with intel. a lot of analysts projected
earnings to come in a bit, that they have dropped about 6.4% in the second quarter on average. we shall see. well, the deal on greece, the third straight day of gains in china, a sign that markets are perhaps getting back to something more like normal. more companies are expected to return to trade today amid a growing sense of calm. where are we now? >> we just got this headline. 250 companies will be ready to be back on line. that brings the number two less than 800 companies that have halted trading. , ayou do the calculations lot of this market is still frozen for trading this morning. we are starting to see investors regaining some confidence in the
long-term uptrend. here is how we ended the day yesterday. about 2.4%. rebounded 13% in three days. the small caps could have been the winners yesterday. up best game in six years, 6%. the small caps were hit the most during this rout. on themhunters focusing now. hong kong is in the green, too. the hang seng was also up as well as the shanghai composite. in -- theve seen gains we have seen in years past have been wiped out by this correction. we did see some traders holding that were purchased with borrowed money. the speculative might have been in the clear. the worst might be over for now, according to clsa. a story coming out talking about how this change in strategy, one
of the three u.s. etf's that now have exposure, they are switching from owning all the small to actually doing a "representative sampling." it really goes to show that with the government taking these steps to stop the rout, there are some potential pitfalls here. course there are. thank you so much for that. coming up next, approval for the greek deal in the u.s. markets. we are live when "first up" continues. ♪
stranded over the weekend. the wind is now blowing ash away from the island. they say they have cleared the backlog of passengers. destroyed at least three boats in the heart of dubai. it is not known what sparked the flames. they also engulfed merchandise on the key. the area is home to hotels, offices, and bazaars popular with tourists. at least one person suffered serious burns. the fire was brought under control after about three hours. and it seems little pluto is a little bit bigger than we thought. on the eve of nasa's historic newy, scientists say the spacecraft has nailed down the size of the distant world. they say it is 2357 kilometers in diameter. that is about 80 kilometers wider than they had thought it the craft's nine-year journey
culminates this evening when it zooms past pseudo-and its moon, cheron. u.s. stocks rising on the greek best three-dayts gain this year. the s&p rising 1.1%. retailers led the gains. netflix reaching a record close of almost 4% higher. amazon was also a big mover. of course, u.s. oil extended its biggest weekly retreat since march amidst prospects of a deal on iran's nuclear program. more on all of this with bill stone, chief investment strategist at pnc wealth management. he joins us from philadelphia. bill, i guess it is all about greece. sighinge the signing --
a sigh of relief or is there more volatility to come? have i think it is good to some sort of a path to an agreement. you have to maybe only take half a side because you really only have that path an agreement because you still need, on wednesday, greece to pass those reforms for the negotiation to begin. we know what the agreement would look like, supposedly, if they passed these things. but it is not over yet. angie: it is not over yet, but bulls, if bill -- eu you stick with it, perhaps this relief rally could gain some legs here. are you one of those investors who think that perhaps the fundamentals are looking better than what this scuttlebutt between greece and everybody else looks like? we went into it saying we
obviously do not like what is going on, but because -- because we would prefer not to have the controversy. it really would not change feature directory of the eurozone the economy or the financial system, obviously. there might be some blitz -- bl ips. the euro exposure, so we thought that insulated us a bit. but leading to an agreement, that is the better way to go, in terms of the investment side of the equation. angie: what is your focus now for investors? hopefully getting back to -- maybe a little away from these macro worries. china seems to have settled down a bit. hopefully it stays that way. earnings season, we will get a chance to look at what companies are actually doing. this week is obviously all about the financials.
those earnings should probably look pretty good. i think that earnings season will be distorted by energy end, it, but in the will probably end up looking ok. angie: do you think the second quarter will look better than the first quarter, especially after the weather event that everybody blamed on the first-quarter slowdown? ll: i do not know how much better it is going to look. at,nds on what you look about 4.5% declines in earnings. that is driven by the 60% decline in energy earnings. energy only looking for a 1% increase. even with a surprise, i think you probably end up in the mid-single digits. maybe more similar to the first quarter than anything else. angie: what about janet yellen coming in and saying we will for sure see something this year. maybe two, but at least one.
part of that, you can think about why the weaker -- the euro was weaker today despite the path to a deal. i think part of it was yelling on friday.- yellen like you said, it is pretty much a done deal, raising rates at some point this year, whether it is september or december. i think the difference in monetary policy drives a little bit of the dollar strength here. angie: it always does. bill stone, we are going to leave it there. always good to see you. ask for that. coming up next, hong kong's multibillion dollar project to clean up its act. at the break, a special report. stay with us. ♪
angie: asia's long-running urban boom has come at a price. many cities suffer choking smog, while others find water supplies reddened by years of pollution. hong kong has been one of them. it has cleaned up most of its act now and is now tackling the finals age. -- the final stage. >> one of the largest wastewater treatment plants in the world. it is the culmination of more than two decades of work to , the up victoria harbour
very heart of hong kong. in this new phase of the scheme expands the collection and treatment of the waste flushed away by hong kong's millions. the aim is to wipe out more than -- it would also at 21 kilometers of deep tunnels to collect sewage from both sides of the harbor. i am standing 157 meters underground that would be about a 50-story building, one of the deepest tunnels in hong kong. this whole area will be filled with wastewater to be taken to a treatment facility. >> [indiscernible] construction is near completion.
shery: the latest upgrade has set up -- hong kong back more than $2 billion. ans was recommended by international panel in 2001 and is now expected to cost only $4 million. -- nearly $4 million. treatment would remove the nutrients that cause so-called "red tide." it would also boost marine life. one member of the expert panel now says research shows that new say the benefits of this next stage would be marginal. spend money that you could be better used in other projects. denied dropping
the next phase but were reluctant to discuss the project . they say the improvement in water body will be assessed the four final decision is made -- before a final decision is made. cent is bust 50 and has filed for bankruptcy protection. he lost a lawsuit over a sex tape. the artist, whose real name is curtis james jackson the third, was ordered to pay $5 million to a woman whose video he posted online. the jury is now considering further punitive damages. next, more from china. detail
angie: it is 7:30 here in hong kong. that is a beautiful look of the here on the hong kong island side. you are seeing a live view right now. we are 30 minutes away from the open of trading in australia, japan, and korea. you are watching "first up." ♪ angie: the top stories this hour -- the greek prime minister is back in athens to sell the deal he reached to keep his country
in the euro. will have tos persuade hardliners to accept austerity conditions. the bailout requires a sales tax overhaul, a broadening of the tax base. the lawmakers will vote on the measures on wednesday. several government members have said that they will not back that deal. which introduced many new issues and faces 50 billion euros of guarantees to public property, which speaks to changes in public law that could lead to the confiscation of public homes, a complete destruction of restitution of value, we cannot agree with it. new pair yety and another deadline. reports that a deal might be close. have ended. sources say diplomats are
preparing a final agreement, though no time has been set for possible release. earlier, the white house signaled that there are still some sticking points. risen, is said to have some reports saying that democrats would walk out and blame the other side if negotiations ailed. chinesen 250 suspended stocks are expected to resume trading after the shanghai composite rally. saw itsl-cap index biggest advance in more than six years. foreign investors sold $6.5 billion of shares last week. let's check in on the markets right now. to new zealand. we are seeing gains, though the kiwi is still under pressure. we are counting down the opens in australia, japan, and korea. yesterday was a recovery for the nikkei, above the 20,000 mark once again. 1.6% higher. of course, the weaker yen is
helping things along. check out futures in chicago. pointing to a higher open. let's get back to the nuclear negotiations. we have dan murtaugh watching developments. accord, how will it affect oil markets? dan: what the oil market is going to be watching are the details on exactly how fast iran will be able to resume their exports. in june, iran produced 2.80 5 million barrels of oil a day -- 2.85 million barrels of oil a day. that is down from before the restrictions were placed against them. thing thatthe last the market needs is a spike in oil prices. the last thing the world needs is another million barrels. that is what people will be
paying attention to, how fast iran will be able to resume pumping out its oil. angie: latest reports that we're just getting now that talks have broken up for the evening in vienna. 1:16 a.m. vienna time. where are we on this? what should we take from the latest? dan: it is tough to say. it have blown through several deadlines. at the same time, everyone seems to be hopeful each time they have blown through a deadline. it seems like, with people preparing documents to sign, things look like they will come to some sort of an agreement or they are close. every time it seems like they are close, they's -- they keep pushing it back. we will have to keep watching to see. angie: if they are close, if there is a deal, it will probably drive oil down, right?
how is that going to affect production elsewhere? dan: you are already seeing it affect production in the united states. the government put out its monthly report today and said that production is expected to fall in august the most since the oil boom started in the late to thousands here in the -- in the late 2000's here in the u.s.. it is not like that everywhere. saudi arabia produced more oil in june than it ever has in its history. they are still out there pumping like crazy, no matter what the price is. angie: indeed. thank you for that. watching the latest development on oil.and its impact staying on oil, china has regained its status as the world's largest importer of crude. .et's ring in david ingles now you have the story. what numbers are we talking?
david: fairly big numbers. they have regained ground for , not thest importer biggest consumer of oil. that is still the u.s. 30 million metric tons per month. that roughly translates to about 7.2 million barrels as far as the u.s. is concerned. the u.s. trying to lessen the impact of import energy. for china, this emergency stockpile, which you call the strategic petroleum reserve program. take a look at oil prices on the one-your chart. prices are still palatable for china to import more than it needs. this program that the government started, back more than five or phasesears ago, three right now. the first phase, 91 million that -- barrels of capacity. they have filled their for
4 storageocations -- locations. the second phase is 116 million. then you have the third phase, still building some of the capacity. the point of this, what china needs to do, 37 days worth of imports. more than 100 days worth of imports. it is very palatable for china to keep going. angie: what about the projections going forward? david: short-term, we are in the second quarter. projections --n oil imports may climb because of this other storage site. again, it is a stockpiling. when it comes to oil demand
consumption from imports, the u.s. is still number one. 20 million barrels a day. more than half of that is produced in the u.s., if i am not mistaken. china at 11.5 million. that is one projection. it is very hard to project these things because there are so many variables involved. you have things like demand -- it is still very cheap for china to do this. on the consumption side, you have auto sales, which are slowing down. and then you have all the air travel. you put all of these things together and it makes my head go in all fours. but the trend is still on its way up. over the past year, that is what the chart looks like.
millionpproaching 30 metric tons per month now. angie: all the numbers you need to know peter david inglis bringing them to us -- need to know. david inglis bringing them to us. here is a look at the other stories we are following today. toshiba could lose half of its board members after investigations into accounting irregularities. at least eight of the 16 directors are likely to step down. toshiba has said that the third-party inquiry will lead to earnings write-downs. delta is said to be backing a proposal to restructure japan's bankrupt skymark airlines. the nikkei news says delta has .ffered to join the plan intrepid aviation has been negotiating with several carriers after saying this time that skymark's own plan
would not win enough support. wandae property developer says they plan to expand into the financial sector. a statement on their website as they are targeting acquisitions in banking, security, and insurance at home and abroad. wanda expects one third of its revenue to come from overseas by 2030. that was a look at some of the corporate stories making headlines this hour. angie: the world's biggest social network has become the fastest company in the s&p 500 to reach market value of $250 billion. that is taking the crown from archrival google in terms of speed. it seems that investors really do believe that facebook is here to stay. >> absolutely.
massive news for shareholders. it has become the fastest-growing company to reach this market cap of $250 billion. , googlet in perspective took eight years. justspoke, they listed over three years ago. we can see that facebook reached $90 overnight. record high,%, the meaning that it did get the market cap. is quite remarkable for facebook. this is when the stock listed at ipo. it was a disastrous ipo. it lost half its value in just four months. this is a really big turnaround to being the fastest company to hit the $250 billion market cap. at 142-- it started billion dollars, but lost a lot of that quite quickly.
it is bigger than walmart and procter & gamble and both of those companies took decades to get to that market cap. angie: investors think facebook can sustain itself. how do they think the $250 billion market cap is going to be sustained? what are they buying into? >> it is mainly advertising, but also this progressive and aggressive strategy that mark zuckerberg and sheryl sandberg have taken on, and that is really to own the social media space. they have bought a number of apps. them, yout to be on have to have a facebook account. a lot of those online dating apps. they are basically trying to own every major competitor apart from twitter in that space. the other thing they are doing, a lot of that mobile advertising. when i was moving from hong kong , i researched stories
on google. when you look on your facebook feed, all you get is ads for that specific. 46% in the first quarter, well above analyst expectations. is other thing they had done they had a $2 billion purchase the virtualhich is reality headset maker. they are moving into that space as well and looking to expand the internet in developing countries. it looked facebook is here to stay. angie: thanks for that. guest saysext, our the u.s. could change its stance on iran. more analysis when "first up" returns. ♪
-- judges convicted three men aged in their 20's for violating antiterrorism and immigration laws. they were arrested while allegedly trying to meet the leader of a group known as the east in the -- indonesia. a military barracks has collapsed in siberia, killing 23 russian soldiers and injuring 19 others. or than 300 personnel were inside the building when part of it came down. the facility was used as a training center for paratroopers . 10 of the most seriously injured survivors have been airlifted to moscow for treatment. the cause of the disaster is under investigation. officials from puerto rico have met creditors to push the case for restructuring the territory's debt.
they defaulted on their debt after an eight-year recession. about 300 representatives of investment companies and other creditors gathered for the meeting in new york. they were asked to be patient while the rescue plan is devised. we could be on the verge of an historic nuclear deal with iran. reports from vienna say negotiators are putting the finishing touches on an accord that might be passed in the next hour. with discuss all of this an associate research fellow. what was the significance of this iran deal mean for geopolitics and stability in that region? thank you, angie. looking at geopolitics in the middle eastern region, it is one of those sticking points that the opposition is not happy
about. you cannot really curb the intentions of iran and that is a point that keeps coming up. all sides have agreed to discuss only the nuclear part. whether it is yemen, iran's activities in iraq or syria, it is right now off the table and it would be a little early to talk about intentions and what they are thinking about for the future. step -- uld this be a guest: i would keep it as a limited response. we are talking about u.s.-iran relations. it is primarily because there are always -- almost four decades of baggage there and multiple different kinds of sanctions. what is on the table right now is the new side and the sanctions related to that.
iran has been designated a state sponsor of terrorism. that is something that is not on the table at all this time around. remain.ant barriers what would be more significant on the european front and the business side regarding european investors. angie: that would be interesting. what with that open up for european investors? guest: you have seen reports. the sort of activity in tehran right now, there are so many investors, european and asian, everyone flocking to tehran to understand what possible opportunities lie if the sanctions are lifted. of course, a time frame of at least a year before they could get moving.
a. years -- a period of 10 is what a framework agreement suggested. angie: 18 days of negotiations. let's talk about the minutia of the details. it is 100 pages with -- and it is all about that critical language now. guest: yes. it began with 80 pages and now , 20 inbecome 100 pages the main draft and 80 in annexes . it is the language of what it comes down to. each party here have to present to the public and the u.s. has to present it to congress.
the security council, the supreme leader will have the final say. the language of the documents is key and that could be what they are haggling on right now. angie: at the end of the day, are we moving closer to a deal? it is expected. that is the buzz. would it surprise you that word of a deal is not done? or is the expectation that the deal is done and we are waiting to hear about it? i would personally not bank on anything or bet on anything right now. both sides -- i mean, this is these that scenario that happened in april before the draft agreement came out, the framework came out. a little bit of buzz. it was a negative buzz and then they were out there in a press conference saying they got it done. there is a lot of sentiment and a lot of expectations. i would just leave it at that right now and let's see.
hopefully, next 24 hours, there should be a key development. angie: and a lot of tension as well. thank you so much for that, joining us out of singapore for the latest on iran. coming up next, big jumps in operating profits could have investors dancing. we will see whether the japanese machinery maker is one of today's big movers when "first up" returns. ♪
juliette: i am looking at a company that operates a chain of used car dealers. it has announced it is expecting first-quarter operating profit to rise. it also announced a state in australian car company buick. should do quite well today. angie: it should, but will it? hope. let's i am watching a japanese firm with 3000 employees. it makes tools that smart phone makers use to cut things. precision industrial machinery for grinding and cutting purposes. angie: now i get it. that is why they call it disco. , the nikkeitory is says it is going to make more money. it is a little bit below forecasts.
i do not really know which way the stock is going to go. can you win that way? david: we will see. yvonne: i do not play safe. i am doing company -- a company that you would pretty much always want to buy from. .eat sauce and seasonings the past year, up 70%. earnings coming out yesterday. operating profit up nearly 5% and sales up 21%. keeping forecasts for the rest of the year unchanged. all analysts surveyed by bloomberg -- buy, buy, buy, buy. -- yvonnel investors has quite a record.